Ford’s third-quarter net loss exceeds $800 million and Volkswagen’s investment in self-driving technology has become the worst hit

A few days ago, Ford Motor released its financial report for the third quarter of 2022. The company’s revenue increased year-on-year, but its profits were dragged down by investments in the field of autonomous driving, and the company’s performance suffered a loss of more than $800 million.

Specifically, in the third quarter of this year, Ford Motor achieved revenue of $39.4 billion, a year-on-year increase of 10%; net loss reached $827 million, and adjusted EBIT reached $1.8 billion. Previously, Ford’s loss-making position was extremely adversely affected by a $2.7 billion non-cash pre-tax write-down on its investment in Argo AI.

In addition, Ford also issued a quarterly profit warning, saying that due to intensified inflation in the United States, the cost of suppliers increased by $1 billion in the third quarter. At the same time, the shortage of parts supply has caused the inventory of its high-profit models to reach 40,000. The situation Not optimistic. The superposition of various factors has caused Ford’s third-quarter report to be less than satisfactory.

In terms of regions, the North American market is Ford’s largest single market and an important source of its revenue. However, due to the rising cost of commodities, intensified inflationary pressure, and most of the undelivered models are high-margin models, the region has Both the EBIT and EBIT margin of the company declined year-on-year in 2021.

In the European market, due to the easing of supply chain tensions, Ford’s third-quarter wholesale volume in the region increased by 23% year-on-year and achieved profitability. The region’s third-quarter EBIT reached $204 million, compared with The loss of $52 million in the same period last year has improved significantly.

In the Chinese market, Ford’s sales in the third quarter fell by 11.3% year-on-year to 133,000 units, but the Lincoln brand grew against the trend and achieved the best third-quarter sales performance since entering China. The Chinese market is relatively stable profit support. In the third quarter, Ford still lost US$193 million before interest and taxes in the Chinese market, which further widened compared with the same period last year.

Ford revealed that the main reason for the loss is the investment in electrification transformation. In September this year, Ford officially launched Ford Electric Mach Technology Co., Ltd. in the Chinese market, focusing on the R&D and operation of smart electric vehicles in the Chinese market. At the same time, Ford Motor also launched the Ford Select exclusive brand of high-end smart electric vehicles, created an independent direct sales network for electric vehicles, and set up 106 sales outlets in 43 cities across the country. .

In addition, in the field of autonomous driving, Ford’s investment in Argo AI has further dragged down the company’s global performance. According to foreign media reports, this autonomous driving startup jointly invested by Ford and Volkswagen is about to close down, and some employees will return to Ford and Volkswagen, but the specific proportion has not been announced. Ford said that the current key task is to develop advanced, differentiated and safer L2+ and L3 autonomous driving assistance technologies, instead of focusing on L4 advanced driver assistance systems.

Ford CFO John Lawler said Ford believes it will take more than five years for an investment in fully autonomous driving to pay off. Obviously, such an investment return cycle is too long, and judging from the losses of related companies, Ford is obviously unwilling to pay more.

Overall, Ford’s performance still has the potential for further growth. If it gets rid of excessive investment in the field of autonomous driving, its future profitability may be further improved. In addition, electric transformation is still an imperative decision, and this part of the investment will continue to increase, and performance may be further under pressure.